Feds Join Lawsuit Alleging Natrecor was Illegally Marketed

Feb 20, 2009 | Parker Waichman LLP

The United States Justice Department (DOJ) just announced that it is joining in two whistleblower lawsuits against drug maker Scios Inc. and Johnson & Johnson Inc. (J&J); J&J is Scios’ parent company. The lawsuits allege the drug makers marketed cardiac drug Natrecor for a use not approved by the U.S. Food and Drug Administration (FDA), said the DOJ. Both suits were filed in the Northern District of California.

The San Francisco Gate reported that the lawsuits allege that J&J defrauded Medicare and other federal health programs and that the drug makers collected hundreds of millions of dollars in reimbursements for unapproved uses of Natrecor.

The DOJ explained that the False Claims Act allows for whistleblower—qui tam—in the Northern District of California and allows for private persons to file such suits to provide the government information about wrongdoing. If it is found that a person has submitted or caused others to submit false or fraudulent claims to the U.S.—such as federal health care programs and Medicare—the government can recover treble damages and $5,500 to $11,000 for every false or fraudulent claim filed. Whistle-blowers can receive 15-to-25 percent of damages awarded, said the SF Gate. The marketing, according to the lawsuits, caused false and fraudulent claims to be submitted to the federal health care programs.

Physicians are permitted to prescribe medications off-label; however, off-label marketing is illegal. The DOJ explained that under the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to the FDA. Before approval, the FDA must determine a drug’s safety and efficacy and, once approved, the drug company may not market or promote the drug off-label. FiercePharma reported that the DOJ intends to fight for reimbursement of money Medicare spent on unapproved uses and noted that if state attorneys general choose to join in the suits, they might also seek Medicaid renumeration.

In August 2001, the FDA approved Natrecor for "the intravenous treatment of patients with acutely decompensated congestive heart failure [CHF] who have dyspnea [shortness of breath] at rest or with minimal activity," said the DOJ, which explained that the study upon which approval was based involved hospitalized patients with severe CHF and who received Natrecor infusions over an average 36-hour period. The government’s investigation revealed that just after the 2001 approval, Scios began an aggressive campaign to market Natrecor for scheduled, serial outpatient infusions for patients with less severe CHF, an off-label use not included in the FDA approval. Patients were prescribed Natrecor infusions for less than six hours on a scheduled basis over an extended time.

Medicare does not cover drugs used for off-label uses unless such off-label use is established to be medically necessary. Federal health care programs, Medicare in particular, paid what the DOJ described as substantial amounts for serial outpatient off-label Natrecor use.

In mid-2005, a panel of prominent cardiologists told Scios to stop promoting the scheduled, serial outpatient use of Natrecor; Scios sent letters to healthcare providers acknowledging that there was insufficient clinical evidence supporting the safety and efficacy of Natrecor for such treatment, said the DOJ. In 2007, Scios released the results of a clinical study confirming there were no significant benefits of the off-label treatment.

The two separate qui tam actions were filed by former Scios sales managers against Scios and J&J. And, while the qui tams contain additional allegations, the U.S. is only intervening with regard to allegations that Scios marketed Natrecor for serial infusions in the outpatient setting. The investigation was conducted by the Civil Division of the U.S. DOJ, the U.S. Attorney’s Office for the Northern District of California, the Federal Bureau of Investigation, and the Offices of Inspector General of the Department of Health and Human Services, the FDA, the Department of Veterans Affairs, the Office of Personnel Management, and the Department of Defense.

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